WA's peak independent sports body says selling off the TAB would rip the heart out of community sport and recreation by robbing it of about a third of its State funding.
The State Government has flagged a possible sale of the State-owned betting agency as part of its $6 billion asset sale considerations.
WA Sports Federation chief executive Rob Thompson said funding made available through the sports wagering account, which is topped up using TAB profits, made up 32 per cent of the $14.3 million allocated to community sport and recreation organisations.
Mr Thompson said the account, which received $4.5 million in sports betting income and unclaimed money in 2013-14, had grown almost 15 per cent each year, helping to bolster WA's sport and recreation industry.
He said a privatisation of the TAB would almost certainly mean the sports wagering account would cease to exist - a "devastating" blow for junior and senior sport.
He was concerned that the significant threat to the sport and recreation industry was being left out of the debate.
"It could potentially have quite a devastating impact in that services and direct grants to sports could dry up," he said.
"It could take away things like the support for training of coaches, administrators and officials and certainly there are some support agencies for community-based sport that rely on this funding as well.
"At the moment the focus has been on the racing industry . . . we are concerned that going into the future people, if the sale goes ahead, won't even consider what aspects of sport are going to be impacted."
Parks and Leisure Australia WA president Mark Casserly said losing the sports wagering account could set recreation in WA back 10 years and decimate participation in physical activity.
Mr Casserly said he hoped the Government would find money from elsewhere to continue funding community sport and recreation should the sale go ahead.
Racing and Gaming Minister Terry Waldron said he acknowledged Mr Thompson's concerns and that the sports wagering account provided substantial money for grassroots sport and recreation organisations.
Mr Waldron said a decision on whether the TAB would be sold was yet to be made.
Shadow racing and gaming minister Mick Murray said the Government needed to meet the racing industry and community groups that would be affected as soon as possible.